Workers’ Compensation – Are You Covered?

Have you been injured while working, only to have your employer assert that you’re not entitled to workers’ compensation benefits because you’re an independent contractor? The employer’s assertion is not the end of the story. As the discussion below shows, in this situation you should always seek out legal counsel before giving up your right to file a workers’ comp claim with the Virginia Workers’ Compensation Commission.

In Virginia, the law requires an employer to maintain workers’ compensation insurance. There are few exceptions to this requirement; as a general rule, if the employer regularly employs three or more workers, the employer goes without insurance at its peril.

Though there may be fights over how many employees an employer has or the issue of “regularly employed,” the rule requiring an employer to maintain workers’ compensation insurance is relatively straightforward. A harder question can arise when a company claims that it does not need workers’ comp insurance because it uses independent contractors and not employees. Recent events regarding the ride-sharing company called Uber illustrate this point.

On June 16, 2015, California’s labor commission ruled that Uber drivers are employees, not independent contractors. A BloombergBusiness article frames the issue the commission faced this way:

San Francisco-based Uber, like other “sharing economy” startups, has built a business around a flexible car fleet piloted by people it contends are independent contractors. If Uber’s drivers were treated as employees, the company would be required to guarantee them a minimum wage, compensate them for mileage and pay into social security.

“We see this as a problem that’s growing larger with each year, with employees lacking security and even basic rights when they are treated as independent contractors,” said Steve Smith, spokesman for the California Labor Federation, which has backed tougher regulations on ridesharing companies.

. . . .

The company has scrapped with regulators from Houston to Berlin on issues from whether Uber is required to follow existing taxi laws to how it handles rider data and even whether its cars can pick riders up at airports.

BloombergBusiness reports that Uber’s arguments in favor of its position scored no points with California’s labor commission:

“The defendants hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation,” the commission said in the decision, filed alongside Uber’s appeal notice. “The reality, however, is that defendants are involved in every aspect of the operation.”

The commission said the company dictates such things as how old a driver’s car can be and who is qualified to offer services through the Uber platform.

The statement regarding Uber’s “dictates” reflects the fact that under the law a worker is an employee if the employer exerts sufficient control over the worker’s activities. The presence or absence of such control is always the test of employee versus independent contractor. The employer’s claim about a workers status is not the defining issue.

So . . . don’t ever let an employer be the final say as to whether you’re entitled to workers’ compensation benefits. Our enduring advice is that an injured worker should always seek legal counsel – and fast! HammondTownsend is here to serve you.

The article mentioned above can be found here:

http://www.bloomberg.com/news/articles/2015-06-17/uber-driver-was-employee-california-labor-commissioner-says

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